So the American economy is in the tank. No offense to any involved countries, but I mean we got beat by Canada! This is, of course, all very depressing news, I think we can agree. It doesn't make me confident about my paycheck. So I have a question. What can I, as an average salary-earning American citizen, do to fix it all? What can I do on a daily basis to improve the economy so that we could once again buy more parts of ourselves at will?

evilryu530

well i think as a collective whole, we can do somthign to fix it. i doubt it will be fixed tho. First off, as an american, we each have to learn to manage our money much better. spend on good debt, definitely purchase assets that you can afford, like a home, don't buy a ridicioulous home you cant afford or a car you cant pay off. We also need to learn to save our money into high yield savings accounts. mutual funds and stocks are not going to get you anywhere.. we need help from the government in forms not like a stimulate rebate, the rebate checks will go straight to the gas stations, to the middle east so dubai can build taller buildings. we need the government to be good with our tax money. we need to invest in industries and fields that will generate jobs, new energy, public transits, things that will create more money so we can find jobs, not give us a 600 dollar check....we need the government to intervine the banks from the get go. the gov needs to say look, lets just flip everyones arm to fixed rates...we should have done that so foreclousures could have been prevented....also, home prices are ridiclous, the rich are ripping the poor....the government comes in and saves the banks after they are about to go into bankruptcy...wtf is that? they also need to cap off gas companies, if gas goes to 5-9 dollars a gallon in the next 2 years...america is screwed...our economy will shut down....rich gets richer, poor gets poorer....no middle class....gov't should really look into renewable engery that is feasable, not corn. ethanol power will just jack the price of produce and corn! we need solar and wind and hydrogen power.....there are lots of things we can do......but we will not do it because the people on top who make the rules in the gov't will never fix the problems, they are living the good life on our tax money....

standready

Sadly, there is nothing you can really do. However, think about reducing your energy consumption as much as possble. Turn items off when not really being used. Drive less, if possible. Combine trips, car pool. Yes, this sounds goofy. Take that extra money saved on energy and pay down/off your debt. Debt paid off, save the extra money or put towards item(s) that will reduce your energy comsumption even more.
Energy prices drive everything else. This is one thing all of can do to help the economy.

standready

@ evilryu530: Government should have long ago regulated mortgage terms. When you can buy a house with zero down payment and a low starting interest rate, the bank is just begging for trouble. Interest rate goes up and this homebuyer just walks away having made payments that are less than rent so buyer is out nothing!
Spectulators drove house prices up trying to "flip" property. Now, buyer above has a house that is worth less than the mortgage. This adds to incentive to walk away.
I do agree with you on renewable energy. I hope the government will renew and expand the energy tax credit.

Aless

It's not in the tank - it's in the low point of the NORMAL fluxation of economies. It is technically impossible for an economy to be UP all the time, as you learn in economics class, there HAVE to be low points. It will go back up again in time, when it's ready. What goes up must come down!

DoctorBeaver

standready wrote:

When you can buy a house with zero down payment and a low starting interest rate, the bank is just begging for trouble.

That doesn't happen just in the U.S. by any means. Here in the U.K. we have exactly the same problem.

It used to be that you could only get a mortgage up to 3 times your annual salary. Then it went to 3.5, and in the end there were many instances of people borrowing 5 times their annual salary. Needless to say, they were really stretching their salaries to afford the installments. Then, when interest rates rose, they were stuffed; eat or pay for the house - no contest.

During the 80s, many banks had enticed home-buyers with milk-sop incentives. That, combined with easy-to-get credit cards, store cards etc, meant that the overall level of debt rose horrendously. When interest rates rose, people couldn't afford to pay back what they'd borrowed and something had to give.

What gave was the housing market. House prices plummeted by up to 50%. This lead to...

standready wrote:

Spectulators drove house prices up trying to "flip" property. Now, buyer above has a house that is worth less than the mortgage. This adds to incentive to walk away.

...negative equity.

Houses were repossessed by the score and people ended up owing banks tens of thousands of pounds they couldn't possibly afford to re-pay.

Did the banks learn from that? No, they didn't - exactly the opposite was true. Sub-prime lending became commonplace. Now we have the same situation all over again. U.K. house prices are once again starting to fall following the credit squeeze resulting from the problems at Northern Rock and other banks.

Northern Rock itself didn't take that many risks with its lending, but the previous imprudence of U.S. banks meant they stopped lending money to other banks. That had a knock-on effect and Northern Rock did not have enough assets to cover its outstanding debts. The U.K. government has bailed out the bank, which has caused a lot of controversy here.

Davidgr1200

The problem has come about because there is more credit than "money". When you are spending more than you actually have there is going to come a time when the money has to "catch up". If at the same time money is not backed up by something that is actually worth something then it will be even worse. apparently the gold backing the dollar was removed a couple of decades ago, which means that the number of dollars will have to decrease until it is equal to amount of "value" (in terms of what people outside the dollar countries will pay for it) again. Unfortunately the amount of credit has grown so much that this involves a disappearance of A LOT of credit. Any extra money thrown at it by the government will have to come from somewhere - where? Again, "value" will have to lie behind it, otherwise it is just increasing the credit and making the problem worse. Expect both credit restrictions AND deflation.

What can individuals do to avoid problems? AVOID CREDIT. Do not buy anything which you cannot pay cash for. Most importantly pay off the loan on your home, because when the money-lending institute needs its money back it will demand the money or sell of you house to get it. This has already started happening with the banks that have gone bankrupt.

Personally I would avoid stocks and shares as well, even if you can pay cash for them.

There is a good rule of thumb which says make sure you have enough money stashed away safely (could be risky if it was in teh wrong bank!) to get you through a year in case you lose your income.

Good luck!

Genesiz

Aless wrote:

It's not in the tank - it's in the low point of the NORMAL fluxation of economies. It is technically impossible for an economy to be UP all the time, as you learn in economics class, there HAVE to be low points. It will go back up again in time, when it's ready. What goes up must come down!

I completely agree with Aless' comment. Most economies (e.g America, Europe etc.) follow a general pattern of up and down. There is nothing that you can do as an individual to stop this from happening. HOWEVER, you can limit the impact it has on you, and deter what i like to call the point at which it effects you (i.e the point when you feel the effect). So yeah, save money wherever you can, but just be ready for judgement day. Those people that do something now will be hit later, but it's coming whether you like it or not.

j_f_k

PatTheGreat42 wrote:

So the American economy is in the tank. No offense to any involved countries, but I mean we got beat by Canada! This is, of course, all very depressing news, I think we can agree. It doesn't make me confident about my paycheck. So I have a question. What can I, as an average salary-earning American citizen, do to fix it all? What can I do on a daily basis to improve the economy so that we could once again buy more parts of ourselves at will?

LOL, look up 'canadion idiot' by weird al Yankovic. You will love it

SpellcasterDX

Hmm I heard somewhere that the government is going to issue checks to people in hopes that they'll spend it and give the economy a short-term boost.

If I remember correctly, it gives $600 to individual tax filers, $1200 to a joint married tax filer plus $300 per child.

I think it's a pretty good deal, but I don't know if that's true. Can anybody confirm if it's true or not?

xtupie

It is quiet simple America, get of credit start using cash. The economy will never get right if you keep on spending more that your earn or the country makes. The value of the US dollar has plummeted because the books are not balancing and it seems as if neither Clinton or Obama have the correct answers or McCain for that matter. Government my cut their spending as must the country as a whole cut there spending. The last I heard the nation debt if growing by 1.5 Trillion dollars a day and that currently the nation debt of America spread over the population would mean that each and every American (including babies), would owe $500,000.00, that is a lot of money and a Lot of Debt.

The best advice to anyone is GET OUT OF DEBT and start saving. If you are in the USA then save in a foreign currency because the US Dollar is going down fast...

The price of Oil is only magnifying the problems. Just think of this statistic for every $1 raise in the oil price the US Air Force's fuel bill increases by 600 million dollars!!!

I know all the worlds economies are taking lots of strain with the High Oil price and over spending but here in South Africa they raise the interest rates, which gives the individual the messages to stop over spending and tighten your belts but America is the only country in the world that lowers the interest rate on Credit when the economy is not performing which encourages people to spend more.

America is also the only place I have been we some will take out a credit card to pay for a cup of Starbucks coffee! Here we pay mostly in cash for things under R100.00 but that is also changing here.

I really love America, I have been there more than 14 times in the last 15 years and I will be very sad to see the American way of life disappear but unless you guys do something about your debt, your economy is doomed to destruction!!!!

nilsmo

The economy goes up and down. The US is going to get beat by Canada (and every other country) occasionally in terms of growth rates occasionally no matter what.

gr8inferno

yea , can't be the best on everything.. geez! ,, US will be heading towards recession but not depression. it's for the better, you'll see.

I say we change our government to Socialism to start on fixing our economy. We can do like South America does. Get into a huge debt and declare a new government to start off debt free to blame it on the previous government. But I doubt that'll happen. So it is best for people to just quit getting into debt. Almost everyone in America has debt, but I for one can control mine. I have a house, car, and credit card payments. I never miss a payment and the credit cards are not used unless I have the money in the account to pay it off. It builds credit. My credit score is 810 and I don't make a lot of money. I am between poverty & middle class. But I manage my money well so I am approved for anything. It's America's own fault for wanting crap that they can't afford.

Capitalism has ruined this country for a second time (remember the Great Depression). I am a strong supporter of Socialism & Communism because , if it lacks corruption, it is the supreme form or economic structure. Capitalism is just too corrupt these days. The philosophy was for the expansion of business and it's employees for larger profits but now it is only for the expansion of the management pockets. Cut backs on hiring, cut backs on hours to null and void private health insurances due to the lack of require hours for eligibility, more importing from foreign countries for cheaper merchandise rather than creating jobs in-house, selling our labor to overseas, it's just keeps going on. The new philosophy of Capitalism is at the heart of the problem. The profits aren't for the growth of the nation but for personal gain and our economy is feeling the wrath of it.

Futile

There are a lot of good points made here but the truth of the matter is that the economy goes up and down. If you do a little data analysis you will see that this “regression” is on a steady fluxing curve that reoccurs with every economy. Problem is some curves are steeper and deeper than others.

James_Hick wrote:

I am a strong supporter of Socialism & Communism because, if it lacks corruption, it is the supreme form or economic structure

.

Communism, as Karl Marx wrote it in the Communist Manifesto is the perfect form of government. The Communism that we know today is based off Lenin’s modification of Marx’s original document. There are no true Communist governments in the real world today, just Totalitarian societies. Communism is an idea and nothing more. It is a Utopia that cannot be attained on a large scale. It may work for small groups in segregated and isolated communities and communes but it will never work on a large scale due to corruption as James Hicks stated. The irony of the whole ideology is that the same human spirit that raises it is also ultimately responsible for its inability to come to full fruition.

friuser

Futile brings up a good point but democracy is also an idea and nothing more. It is a Utopia that doesn't work cause it's based on an ideal. For example just look at the USA voting system and what happened in Florida in 2000 presidential election. You have for example a political party defranchising voters by making it more difficult for them to vote or even making their votes not count.

Fixing the economy is very simple. Just be rich and smarter than the average american. If everyone does that just imagine what can happen!

ankitdatashn

Is this an only US citizen thread may I know...

aswapathy

Raising worms will give you good soil. With good soil you can grow vegetables. If you have vegetables you won't have to buy those that are being planed, trained, and trucked all over the place.